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TULSA – The e-discovery company Avansic has opened executive offices in Dallas and New Orleans.
Avansic also is establishing sales offices in Denver, Chicago and other cities. These moves, capped by the recruitment of industry leader Tom O’Connor, represent a new growth strategy for the Tulsa startup by former University of Tulsa professor Gavin Manes. “Our business will always follow where our revenue is,” Manes said in explaining his staff reorganization. “Business is strong right now for us, but it was a really hard year, probably for any business, probably even harder for startups or early-stage companies. We consider ourselves early stage.” The recession caught up with Avansic last summer as it released two new products that shifted its foundation from digital forensics to a full-service electronic storage information company. With the success of both e-discovery products, Manes projected 10-fold growth in revenues, from just under $3 million expected for 2009 to $10 million this year. But two factors blocked that. Billing by hour instead of amount of data handled, Manes said Avansic’s rising efficiencies effectively undercut its revenue growth. The firm has now changed its billing measure to gigabytes. As the 2009 summer settled into fall, the firm also endured slowing customer traffic and payments. By December, accounts receivable topped $350,000. “We were cruising along thinking everything was fine, only to realize in December, ‘Oh, that was a bad year,’” Manes said of the recession. “Our industry got hit in early summer 2009. That was a lot later than any other industry, we believe.” With 2009 revenues settling at just over $1 million, slightly better than 2008 results, Manes restructured his work force to put more emphasis on sales. That team now accounts for about a third of his 17-employee staff. With its sixth anniversary approaching in September, Avansic now targets $3 million revenue this year, with $10 million on the 2011 horizon. “This recession cost us maybe a year of doing business,” said Manes, president and chief executive of Avansic. “With that, the growth is all out of state. Ninety percent of our revenue is from outside the state of Oklahoma. So clearly, if 90 percent is out of state, we have to go get that business and bring it back here.” With many competitors melting away through the recession, Manes switched his growth strategy back to his original plan, establishing regional offices feeding his Tulsa base. The first two came this summer in Dallas and New Orleans. “What those regional technical directors do is, they give us the look and feel of a local company with someone who‘s technical enough to deal with our client base, but none of the work is done there,” he said. O’Connor, based in New Orleans, represents a nationally recognized authority in the still-young industry. A Consultant, speaker and author, he has participated in a number of complex cases, from asbestos, breast implants and tobacco litigation to the Enron and Madoff cases. “I’m still amazed we could get them,” said Manes. “He gives us that edge in New Orleans. “It’s very much like Oklahoma,” he said of doing business in the bayou state. “You’ve got to have a local presence. You’ve got to be there, constantly talking to the customers.” Dallas represents the other side of things, a very mature market experienced in e-discovery matters. “In Oklahoma and Arkansas and New Orleans we have to educate our customer on how to buy a product,” said Manes. “Whereas in Dallas, everyone understands what the product is, they know how to buy it.” Besides Chicago and Denver, Manes said Avansic is hiring sales staffs in Houston and Little Rock, where it anticipates strong growth. Manes spent four months himself in the Arkansas capital, where e-discovery remains optional. “Our issue with expansion is we need direct, affordable flights,” he said. That’s one reason why the company’s revenue has declined in Kansas City – Tulsa lost its direct connection to that hub. |
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Copyright 2008 Avansic
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